Online California LLC

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Online California LLC

Save money and time with the Online California LLC formation application. Our easy-to-use service helps you form your LLC directly online without the costly attorney fees. Pick a package, complete a comprehensive interview online, follow our step-by-step instructions, and leave the rest to us. We file your articles of organization with the California Secretary of State for you and your LLC will come into existence the day they're filed.

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Please note We believe accurate, plain-English legal information should help you solve many of your own legal problems. But it's not a substitute for personalized advice from a knowledgeable lawyer. If you want the help of a trained professional-- and we'll always point out situations in which we think that's a good idea-- consult an attorney licensed to practice in your state.

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Nolo has dozens of products created just for California residents. Check out Nolo's list of California products.

What is a limited liability company?

A limited liability company, commonly called an "LLC," is a business structure that is similar to a corporation, but less formal. Business owners form LLCs to protect themselves from being personally liable for business debts.

LLCs combine the pass-through taxation of a partnership or sole proprietorship with the limited liability of a corporation. As in a partnership or sole proprietorship, income "passes through" the LLC to the LLC owners, and the owners report the business's income on their personal income tax returns. Unlike a corporation, the LLC itself is not a separate taxable entity.

Like owners of a corporation, however, all LLC owners are protected from personal liability for business debts and claims—a feature known as "limited liability." This means that if the business owes money or faces a lawsuit for some other reason, only the assets of the business itself are at risk. Creditors usually can't reach the personal assets of the LLC owners, such as a house or car. (However, both LLC owners and corporate shareholders can lose this protection by acting illegally, unethically, or irresponsibly.)

The decision to form an LLC is an important one. Like a corporation, an LLC is meant to be a permanent legal entity, and it will exist—and incur taxes and fees, whether or not you are actively operating a business—until you take legal steps to dissolve it.

To learn more about limited liability companies and whether an LLC is the right structure for your company, visit the Limited Liability Company area of Nolo's website.

How many people do I need to form a California LLC?

Is an LLC right for my business?

You should consider forming an LLC if you plan to run a business and are concerned about personal exposure to lawsuits or debts arising from your business. For example, if you decide to open a store-front business that deals directly with the public, you may worry that your commercial liability insurance won't fully protect your personal assets from potential slip-and-fall lawsuits or from claims by your suppliers for unpaid bills. Running your business as an LLC may help you sleep better, because it instantly gives you personal protection against these and other potential claims against your business.

Corporations also provide this protection from personal liability. Which is better? For many small businesses, the relative simplicity of the LLC makes it the better choice.

However, corporate taxation is very different from the taxation of LLCs, and this can be a deciding factor in which type of business you form. For instance, if your business will hold property such as real estate that's likely to increase in value, an LLC may make more sense, because corporations and their shareholders are subject to a double tax (both the corporation and the shareholders are taxed) on the increased value of the property when the property is sold. On the other hand, corporate income tax rates start out low—15%—so having the corporation rather than the owners taxed on some of the income may make sense.

Note that not all businesses can operate as LLCs. Businesses in the banking, trust, and insurance industry, for example, are typically prohibited from forming LLCs. California additionally prohibits professionals such as architects, accountants, doctors, and licensed healthcare workers from forming LLCs.

In addition, some businesses are so small that the fees and paperwork involved in setting up and running an LLC just aren't justified, especially in California, where both LLCs and corporations must pay an $800 annual tax to the Franchise Tax Board. If it's lawsuits you're worried about, often a commercial liability insurance policy can shield your assets sufficiently (however, insurance does not cover unpaid business debts).

Note that Nolo's Online California LLC does not allow you to form a series LLC, a restricted LLC, or a professional LLC.

For more information on whether an LLC is the right structure for your business, visit the Business Formation area of Nolo's website or read Nolo's book LLC or Corporation? How to Choose the Right Form for Your Business, by attorney Anthony Mancuso (available as a downloadable eBook). Or, if you'd like the advice of a professional, our website features an online lawyer directory as a free resource to our customers. Comprehensive profiles of business attorneys in your state can be found at www.nolo.com.

How do I form an LLC in California?

In California, you create an LLC by filing "articles of organization" with the Secretary of State's office and paying a filing fee. You'll also need an LLC operating agreement, though it doesn't need to be filed with the Secretary of State. Your operating agreement explicitly states the rights and responsibilities of the LLC owners (and managers, if applicable). An operating agreement clarifies the business arrangement between the owners and governs how your LLC will be run. If you don't create a written operating agreement, the LLC laws of your state will govern the inner workings of your LLC. For more information, see Does my LLC need an operating agreement?, below.

After your articles of organization have been filed and you have an operating agreement, your LLC is official, but you will still need to obtain the licenses and permits that all new businesses must have to operate. These may include a business license (sometimes also referred to as a "tax registration certificate"), a federal employer identification number, a sellers' permit, or a zoning permit. Forming an LLC does not exempt you from any of these requirements that apply to all businesses.

How much will it cost to form my California LLC?

Nolo's Basic Service. The price starts as low as $99.00 for Nolo's Basic Service, which includes preparation of the articles of organization, preparation of a customized operating agreement, and standard filing, which will take one to two weeks.

Nolo's Express Premiere Service. For all of these items plus Priority Rush Filing, a personalized LLC records book, membership certificates, an LLC seal, and preparation of the IRS application for a tax ID (Form SS-4), choose Nolo's Express Premiere Service for $299.00. With Priority Rush Filing, your LLC will be filed with the Secretary State within one business day, and you'll receive your final LLC documents two to three business days later.

Note that filing fees charged by the state are not included in our package prices. The Secretary of State charges $75 in filing fees, which includes a certified copy of the articles of organization. The filing fee will be added to your total when you check out.

In addition, within 90 days of your formation, you will need to submit a statement of information along with a $20 filing fee. (You can file it online here.) LLCs also pay an $800 annual tax, due on the 15th day of the 4th month following your LLC's formation and every April 15 thereafter (assuming your LLC has a calendar tax year), or on the 15th day of the 4th month after the start of your fiscal year.

What this means is that, if you create your LLC with the Secretary of State in December, you'll have to pay $800 by March 15 for your first (short) tax year and then another $800 by April 15. There is one exception to this rule. If you create your LLC on or after December 17, and you don't do any business until January 1, the first year's $800 minimum tax is waived, and you would just owe $800 by April 15.

To compare Nolo's California LLC packages, see the package and pricing details. Please note that coupon codes are not applicable to LLC packages.

How long will it take to form my California LLC?

If you order the Basic package, we will file your paperwork with the California Secretary of State within four to five business days and you will receive your completed LLC documents by email three business days later.

If you order the Express Premiere package, we will file your paperwork with the California Secretary of State within one business day. We will send you your completed LLC documents two to three business days later. You'll receive your LLC records kit directly from the manufacturer.

How long do I have to work on my LLC order?

Will I have to pay taxes on my California LLC?

Federal taxes. The IRS does not impose taxes on the LLC; LLC income is reported on the members' individual tax returns.

State taxes. You must pay an annual LLC tax to California's Franchise Tax Board (FTB) within 3-1/2 months of formation. That tax is currently $800 per year. After the year of formation, the tax is due by April 15 each year, assuming your LLC has a calendar tax year. This tax must be sent to the Franchise Tax Board with FTB Form 3522, Limited Liability Company Tax Voucher, available at http://ftb.ca.gov.

In addition, if your LLC's net annual income exceeds $250,000, you may be required to pay an additional "fee" with your annual tax return, Form 568, Limited Liability Company Return of Income. Like individual tax returns, your LLC tax return is due by April 15 of each year (assuming a calendar tax year). You can find Form 568 on the Franchise Tax Board's website at http://ftb.ca.gov.

Self-employment taxes. LLC members (owners) who are active in the business will probably have to pay self-employment taxes on their share of LLC profits—just as partners in a partnership do. Fortunately, an LLC member can deduct, as a business expense, half of the self-employment taxes paid. (Members in manager-managed LLCs may not have to pay self-employment taxes if they are not active in the business; if you are in this situation, consult a tax adviser to see if you should pay self-employment taxes.)

Do I need a lawyer to form an LLC in California?

You can form your own LLC online by using Nolo's Online California LLC. We will walk you through the information needed to form an LLC. If you have a complex question, you may want to consult a business lawyer or tax expert. Our website features an online lawyer directory as a free resource to our customers. Comprehensive profiles of business attorneys in your state can be found at www.nolo.com.

If you are trying to convert a corporation or partnership into an LLC, you should consult an attorney. There are some legal and tax ramifications to closing down an existing business and starting a new one that are beyond the scope of our service.

Can I form an LLC in a different state than the one in which my business will operate?

LLCs formed in California are required to have a designated office in California, though it does not have to be where business activity takes place. If your business does not have a physical address in California, Nolo cannot create a California LLC for you.

If you were to form an LLC out of state, say in Delaware, you would still need to qualify your LLC to do business in your home state—and this means you'll have to file additional paperwork and pay additional fees. For more information on whether you'll need to qualify to do business in certain states, read Nolo's article Qualifying to Do Business Outside Your State on Nolo's website. Note that if you don't register to do business in another state when required, you won't be able to enforce contracts in that state.

Also, be ready for some state tax complications if you form your LLC in a state that's different from the state where all of its members live. For one thing, the LLC members might have to pay personal income taxes in the other state on LLC income. (At best, you might get credit for those taxes in your home state and not have to pay twice. At worst, you might have to pay taxes you wouldn't have had to pay at home.) Other state taxes vary from state to state, and might influence your choice of location for an LLC. An LLC—like any business—has to pay franchise taxes, sales and use taxes, other transaction and excise taxes, and employment, property, and transfer taxes.

In addition, in most states, you need to maintain a registered agent in the state where you form your LLC. To avoid these hassles, most smaller LLCs that will operate in only one state form their LLC in their home state. For more information, read Nolo's article Where to Form Your LLC.

Also, keep in mind California won't let professionals (such as accountants, architects, and massage therapists) form LLCs. Professionals who are not allowed to form an LLC in California can form a registered limited liability partnership (RLLP) or a professional corporation. The Secretary of State's website has more information on these options.

Are LLC members subject to self-employment taxes?

An LLC member who is active in the business—like a partner in a partnership—has to pay self-employment taxes on his or her share of LLC profits. Members in manager-managed LLCs may not have to pay self-employment taxes if they are not active in the business. The self-employment tax situation for LLC members has been a subject of controversy and temporary regulations, and the dust has not yet settled around many of the issues. If you will be an inactive member of an LLC and don't waht to pay self-employment taxes, talk to a tax expert or LLC lawyer.

Do LLC membership interests need to be registered as securities?

If any of your members will not be active in the LLC or if you choose manager-management for your LLC, you may need to comply with federal and state securities procedures when setting up your LLC. (If you'll be the sole owner of your LLC and you don't plan to take investments from outsiders, your ownership interest in the LLC will not be considered a "security" and you don't have to concern yourself with these laws.)

Does forming an LLC mean I don't need a business license?

Forming an LLC does not take the place of obtaining a business license, tax registration certificate, or other required business permits. An LLC merely creates an ownership setup that limits the owners' personal liability. For more information on required licenses and permits, see the Licenses & Permits for Your Business area of Nolo's website.

Can I form an LLC in California for cannabis-related activities?

Due to a new law legalizing recreational marijuana in California, effective January 1, 2018, the California Secretary of State is now accepting articles of organization for LLCs that will perform cannabis-related business activities. Filing articles of organization with the Secretary of State alone, however, does not provide an LLC with the necessary licenses to conduct cannabis-related activities. After submitting articles of organization, you'll need to submit a licensing application to either the Bureau of Cannabis Control, the Manufactured Cannabis Safety Branch, and/or CalCannabis Cultivation Licensing, depending on whether your LLC will be involved in growing, selling, testing, or manufacturing cannabis-related products. You'll also need to work with the city and/or county where the cannabis-related activities will take place. More information can be found at the Secretary of State's California Cannabis Portal at www.sos.ca.gov/business-programs/cannabizfile/, or you may find their Cannabis FAQ helpful.

How can an LLC be ended after it has been formed?

Your LLC will exist—and incur taxes and fees, whether or not you are actively operating a business—until you take legal steps to dissolve it. If you decide to discontinue business as an LLC, you must file a certificate of cancellation and possibly a certificate of dissolution with the Secretary of State. For specifics, read the Frequently Asked Questions on the Secretary of State's website.

In addition, certain franchise tax requirements must be met before you are off the hook for your business. For more information, see FTB Publication 1038, Guide to Dissolve, Surrender, or Cancel a California Business Entity on the Franchise Tax Board's website at http://ftb.ca.gov.

What happens after I pay?

Note: You will receive a confirmation email that includes the following information.

Your articles of organization will be generated and filed with the Secretary of State. Turnaround times vary according to the package you choose.

If you ordered Nolo's Express Premiere Service, your LLC records binder and company seal will be sent to you independently, directly from the manufacturer.

As soon as your filing is complete, we will email you your final LLC documents, including your customized operating agreement and instructions on a few more steps you need to take, including holding an initial meeting of your members or managers.

After completing your purchase, you may no longer go back and change your answers because your order is being processed. You may, however, view your answers by signing in to your Nolo account at www.nolo.com/products/customer/account/login, clicking on My Account, and clicking on California LLC.

Once we send your documents to the Secretary of State, we cannot refund your state filing fees or other third-party costs should you decide to cancel your order. If you have a question after submitting your order, you may contact our filings specialists here.

What if I want to change the information I gave you for my new LLC?

You can take as much time as you like to work on your LLC answer choices. Every time you add or edit an answer, your work is automatically saved.

After completing your purchase, you may no longer go back and change your answers because your order is being processed. You may, however, view your answers by signing in to your Nolo account at www.nolo.com/products/customer/account/login, clicking on My Account, and clicking on California LLC.

Is there an advantage to using Nolo to form an LLC?

Yes, Nolo's formation service provides comprehensive on-screen help to guide you through any questions you may have along the way, as well as customer service phone support and automated error checking. You also receive a customized operating agreement, which is integral to the proper set-up and operation of your LLC, and if you choose, an LLC records kit and seal and a filled-out IRS Form SS-4, Application for Employer ID Number.

Customer Reviews

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Good service and better price by Thomas L.

Reasonable price and fast service, It took only one day to form our LLC in California. The fee is better than the other competitors for online service. Excellent form design to guide you through the process. We highly recommend Nolo. (Posted on 10/5/2018)

Very pleased by Luana P.

We set up our new LLC using the Nolo online service. Everything was simple to understand. Nolo took care of everything needed to get us up and running in about 10 days. Would absolutely recommend this Nolo service. (Posted on 8/3/2018)

Greatfull by Daniel J.

Great and very worth it. Thank u nolo (Posted on 7/15/2018)

Great ! by Eduard I.

Great product, processed in a timely manner and in the best possible form, very impressed and satisfied, thank you and keep it up ! (Posted on 5/12/2018)

Much better than Zegal-Loom by Steven B.

Started out at another (very well known site) and discovered quickly said site was more interested in selling add-ons than actually helping me through the LLC process. NOLO is great. Explained the "why's" and reasons for each decision one is required to make, very easy to negotiate through the site, and a great non-intimidating experience. My LLC packet arrived quickly with clear instructions on my next steps. Very happy I went with them. (And IIRC, they were only $10 more than the site-which-shall-not-be-named) (Posted on 4/25/2018)

Review by Nivia S.

Nolo filed my LLC saving me time. Received information on future filings but would have liked more clarification on the FTB filings. It took two calls. to FTB and long holds to get to them to finally find out that two annual forms must be filed yearly. FTB 568 by 3/15 and the other (LLC VOUCHER) by 4/15.with the annual fee. FTB forms are online and payment can be done online. There's also an FTB guide for LLC which I requested to be mailed to me from FTB. (Posted on 3/23/2018)

Easy! by Katrina Joie A.

They were very quick and easy! Only thing is that I had a hard time finding their number to follow up, but that is mostly done so less people call. (Posted on 1/23/2018)

Can't believe I stressed about it by Wendy M.

So easy and fast. Thanks for helping us get through the paperwork with peace of mind. Wish we would have signed up with NOLO a lot sooner (Posted on 1/22/2018)

Easy and professional by Gavin S.

We used Nolo to incorporate our LLC in California, and the process could not have been easier or more professional. We recommend Nolo without reservation! (Posted on 12/29/2017)

Review by Clarinel B.

I am very much satisfied with my application and the whole process of acquiring my LLC approval. It is fast and the online form is easy to navigate even for one with limited tech knowledge like me. Thanks Nolo. Nice doing business with you. Highly recommended! (Posted on 11/9/2017)

Review by Anonymous

extremely easy to use. i have used them many times over the years and have always been satisfied with the results. (Posted on 5/18/2017)

Very easy by Anonymous

Very easy to incorporate with Nolo. You also learn alot as you are forming your corporation. An Awesome service (Posted on 4/5/2017)

Clear step-by-step process and excellent customer service by R. Steinbeck

I really liked this product. It walked me through the entire process step by step. It was pretty self-explanatory. A staff member at Nolo Press contacted me afterwards, as there was a question about one of the entries I made. Excellent customer service. I can highly recommend using this product for setting up an LLC in California. (Posted on 4/3/2017)